By TIOL News Service

CHENNAI, JAN 24, 2015: THE Single Judge had held thus -

'To put it differently, the cash seized from the office premises of the petitioner in the second writ petition is on suspicion. Suspicion cannot take the place of proof, however, strong it may be. Therefore, refusing to order the provisional release of the cash seized from the premises of the petitioner in the second writ petition, may give a leverage or licence to the Respondents to stamp any item or cash seized from any office premises as the sale proceeds of smuggled goods. The scheme of Sections 113 read with Sections 121 to 124 do not appear to authorise such a course. As I have pointed out in para 17 above, two pre-conditions are to be satisfied for invoking Section 121 of the Act to order confiscation. There is no prima facie evidence to show that both these pre-conditions are satisfied in the second case on hand. The Constitutional guarantee with respect to the right to property under Article 300Acannot be allowed to be infringed at the drop of the hat, by allowing the officers to walk into any office and seize cash on the ground that they represent the sale proceeds of the smuggled goods. Therefore, I am of the view that the second writ petition deserves to be allowed.'

Resultantly, the High Court had allowed the Writ Petition by directing the DRI to return the amount of Rs.7,00,000/- Indian currency seized from the office premises of the petitioner.

The DRI has filed a Writ Appeal against this order before the High Court.

It is submitted that while allowing the Writ Petition the Single Judge had failed to take into account an important fact that the Respondent, instead of answering the five summons issued to him beginning from 16.07.2014 to 14.08.2014 for his personal appearance etc., had filed the Writ Petition without any valid reason or cause.

After considering the exhaustive submissions made by both sides, the Division Bench of the High Court observed -

+ Sub-section (3) of Section 108 of the Customs Act, 1962 makes it mandatory upon a person summoned under the Act to state the truth upon any subject respecting which he is examined or makes a statement.

+ If a person summoned or required to answer the questions or to adduce evidence in connection with the summons issued under Section 108 of the Customs Act, fails to do the same, then he is to face the necessary consequences.

+ To put it succinctly, a summon can be issued to a person for the production of documents or those in possession or under the control of persons summoned and such a person is bound to attend and state the truth upon any subject pertaining to which he is examined by the summoning officer and these powers are showered obviously with an idea to check the smuggling.

+ The existence of a belief is a pre-condition for seizure and also that if there existed some material upon which such a belief could be formed the Court is not concerned with the propriety or the belief or sufficiency of material as per decision Gopaldas Udhavdas Ahuja V. Union of India 2004-TIOL-123-SC-CUS.

+ Under Section 110 of the Customs Act, 1962 a proper officer has power to seize goods if he has reasonable belief that the goods are liable for confiscation. Of course, there must be some material so as to form a reasonable belief. As a matter of fact, law does not require that at this stage that the matter has to be established to the very core that the goods are smuggled goods. Moreover, seizure is made at the preliminary/initial stage to find out whether the same are smuggled/contraband goods and at that stage, a detail enquiry is neither practicable or possible nor permissible.

+ The Respondent/Petitioner is obliged to attend in pursuance to the summons issued under Section 108 of the Customs Act and is expected to state the truth and further he is to appear before the officer concerned in obedience to the summons issued and in compliance with law. Without making his appearance before the concerned officer and avoiding the five summons issued, the filing of Writ Petition by the Respondent/Petitioner is a premature and otiose one.

+ Ordinarily, as against the issuance of summons, a Writ Petition would not lie. When the Respondent had not participated in the enquiry/investigation proceedings by dissuading the five summons issued to him, then, the filing of the Writ Petition by him is devoid of merits, is the considered opinion of this Court.

++ In view of the fact that the Learned Single Judge had not borne in mind the ingredients of sub-section (3) of Section 108 of the Customs Act, 1962 which makes it mandatory upon the person summoned under that Act to state the truth upon any subject respecting which he is examined or makes a statement, this Court comes to an inevitable and irresistible conclusion that the views taken by the Learned Single Judge that 'Suspicion cannot take the place of proof, however, strong it may be….may give a leverage or licence to the Respondents to stamp any item or cash seized from any office premises as the sale proceeds of smuggled goods ' and consequently, allowing the said Writ Petition by directing the Appellants to return the amount of Rs.7,00,000/- of Indian currency seized from the office premises of the Petitioner on 24.06.2014 etc., are clearly unsustainable in the eye of law.

++ The observation of the Learned Single Judge to the effect that 'The Constitutional guarantee with respect to the right to property under Article 300A cannot be allowed to be infringed at the drop of the hat, by allowing the officers to walk into any office and seize cash on the ground that they represent the sale proceeds of the smuggled goods .' is not a correct and legally valid one, in the considered opinion of this Court, based on the facts and circumstances of the present case which float on the surface.

++ Viewed in that perspective, this Court, to prevent an aberration of justice and in furtherance of substantial cause of justice, interferes with the said order dated 08.10.2014 passed by the Learned Single Judge and sets aside the same.

The Appellants were directed to issue fresh summon to the Respondent and the Respondent was directed to appear before the concerned officer at the specified date and time mentioned in the summon without fail.The Writ appeal was disposed of.

(See 2015-TIOL-196-HC-MAD-CUS)